Thousands Of Steel Jobs In The Balance After Collapse Of Greensill Capital Finance Company

Thousands Of Steel Jobs In The Balance After Collapse Of Greensill Capital Finance Company.

Thousands of jobs in the steel industry are in the balance after Greensill Capital, one of the UK’s largest speciality finance companies, went into administration. Greensill, whose advisers include the former prime minister David Cameron, is a major provider of finance to Liberty Steel – the UK’s third-largest steel company.

Liberty, which is part of the GFG Alliance controlled by the so-called “Saviour of Steel” Sanjeev Gupta, employs 3,000 people directly at 11 sites including Rotherham and Stocksbridge in South Yorkshire, Newport in South Wales and Hartlepool.

Lawyers for Greensill Capital, set up in 2011 by Australian Lex Greensill, told the High Court in London it was in ‘severe financial distress’ and had ‘no conceivable way’ of meeting a £101 (€117.89) million repayment demand from bank backer Credit Suisse.

The demise of the firm – which specialises in supply chain finance – will send shockwaves through the British economy and put thousands of jobs in the steel industry at risk.

It also lends to major corporations including AstraZeneca and Vodafone and around 1,000 pharmacies use the firm to borrow money to fund the cost of medicines. Furthermore, the lender owns a business called Earnd, which allows NHS workers to get parts of their salary ahead of payday.

US private equity firm Apollo Global Management was last night picking over Greensill’s carcass as it seeks to buy the best parts of the group.

However, it has offered only £43 (€50)million for the assets it wants – a far cry from the £5 (€5.84)billion value Greensill had recently been targeting in a potential stock market listing. Apollo will retain ‘the majority’ of the company’s 595 UK employees if a deal is done, according to court documents seen by the Financial Times.

A spokesman for Grant Thornton, the administrator, said it was in ‘continued discussion with an interested party in relation to the purchase of certain Greensill Capital assets’.  The deal will likely wipe out shareholders, including Japanese investment giant Softbank which had ploughed £1billion into the firm in 2019.

The collapse is a humiliation for Greensill, 44, whose popularity with government officials landed him a CBE in the 2017 Queen’s Birthday Honours List.  ‘He said it was ‘the graduation that my mother was never able to go to, at Buckingham Palace’.

Both Greensill and Gupta were plunged into crisis last week when the lender’s main insurer refused to renew key cover.  This meant that rather than being insured if its borrowers failed to repay, Greensill would have to bear the brunt of any losses.

Thank you for taking the time to read this news article “Thousands Of Steel Jobs In The Balance After Collapse Of Greensill Capital Finance Company”. For more UK daily news, Spanish daily news and Global news stories, visit the Euro Weekly News home page.